BOE plans display unit in Chengdu

Firm to further tap touchscreen sector, invest $8.8b on new production line

Chinese display panel maker BOE Technology Group Co Ltd said late on Tuesday that it plans to invest 63 billion yuan ($8.8 billion) to set up a new active-matrix organic light-emitting diode (AMOLED) production line in Chengdu, Sichuan province.

Industry experts said the move will speed up the optimization and upgrade of China's semiconductor display industry.

BOE's products will be mainly high-end touchscreens such as those on laptops and tablets, the company said in a filing to the Shenzhen Stock Exchange.

A total of 32,000 glass substrate panels — of 2,290-millimeter width and 2,620 mm length — are expected to be produced every month. The panels will be used in midsized OLED products, BOE said.

The company said consumers prefer laptops and tablets that are thinner and more portable, thus driving the development of flexible and foldable display panels.

The new AMOLED production line will also propel the technological innovation in OLED panels, and push the iteration of laptops and tablets, it added.

Data from market research company Omdia showed that global shipments of laptops equipped with OLED panels amounted to about 6 million units in 2022, up 19 percent year-on-year.

According to a report by industry tracker Display Supply Chain Consultants, shipments of OLED screens used in high-end IT devices will increase to 44 million units in 2026, with a compound annual growth rate of 51 percent.

DSCC also forecast that the revenue from OLED tablet panels will exceed $2 billion in 2026, with a CAGR of 46 percent.

Industry insiders said AMOLEDs are more flexible compared with traditional liquid crystal displays (LCDs), and have great improvements in terms of image contrast, brightness and color spectrum.

Chen Yanshun, chairman of BOE, said in a previous interview that the company aims to build flexible OLED industrial clusters in Southwest China.

Currently, it owns three flexible AMOLED production lines in Chengdu and Mianyang in Sichuan province, and Chongqing.

Chen Jun, vice-president and chief analyst of Beijing-based market researcher Sigmaintell Consulting, said the completion of the new production line will further reduce manufacturing costs of OLED panels, and improve the competitiveness of China's semiconductor display sector globally.

Chen said an increasing number of OLED panels are gradually being applied in tablets, laptops and midsized electronic devices.

According to Sigmaintell, global shipments of tablets equipped with OLED panels will reach about 3.5 million units this year, with a penetration rate of 1.4 percent.

The penetration rate of OLED panels used in tablets is expected to increase from 5.7 percent in 2024 to 17.9 percent in 2028.

BOE topped the domestic market, with shipments of flexible OLED panels used in smartphones reaching 76.65 million units in 2022, making it the world's second-largest OLED maker after South Korea's Samsung Display, the consultancy said.

China will overtake South Korea to become the top OLED manufacturer by 2024, as Chinese companies have invested heavily in new OLED production lines, said Zhou Hua, chief analyst at CINNO Research, a Chinese panel display consultancy firm.